Income Tax Avoidance in Indonesia: Regulatory Loopholes and the Effectiveness of Tax Supervision

This study aims to analyze the factors that encourage taxpayers to engage in income tax avoidance and examine the measures that tax authorities should undertake to prevent such practices through strengthened tax supervision and law enforcement. This research employs an empirical legal research method with a qualitative approach. Primary data were obtained through interviews with six respondents, consisting of three taxpayers and three tax officers at the Makassar Medium Tax Office. Secondary data were collected through library research, including legislation, books, scientific journals, and other relevant tax literature. All collected data were analyzed qualitatively to address the research questions. The findings indicate that income tax avoidance is influenced by several factors, namely the perception of taxes as an economic burden, limited transparency in public tax expenditure, inadequate tax education and outreach, perceptions of unfairness within the tax system, and low levels of taxpayer trust in the government. Preventive measures that should be undertaken by tax authorities include strengthening taxpayer supervision, optimizing tax education and outreach, reinforcing law enforcement and the application of tax sanctions, utilizing information technology in tax administration, and improving regulations to minimize legal loopholes that may be exploited to reduce tax liabilities. This study recommends that the Directorate General of Taxes integrate preventive and repressive approaches proportionately to improve taxpayer compliance, strengthen the effectiveness of tax supervision, and minimize income tax avoidance practices sustainably.